as the debt debate draws fire, here's your morning punch line. >> we raised the debt ceiling 17 times under reagan. apparently for past congresses >> nancy pelosi, john boehner, there's harry reid, freeze it right there. freeze it right there. okay. harry reid, they can't agree on a budget. they agree on everything else. look at them. look. same hair, same glasses, same sport coat, same shirt! why can't you agree on this! >> and that's it for us. "american morning" continues right now. >> and time is running out. good morning. i'm kiran chetry, with seven days until the deadline, president obama makes his case for a debt ceiling deal while acknowledging that the nation is fed up with how divided washington has become.

>> i'm christine romans. house speaker john boehner says no way to the president's plan. he has another solution and it's simply says, spend less. >> i'm ali velshi. congressional websites crash. what president obama said that had a number of websites going off-line. details coming up on this "american morning." thanks for being with us. tuesday, july 26th. welcome to "american morning." we all stayed up later than usual last night to get a chance to hear from the president about this debt ceiling showdown as well as from the house speaker. >> and still divided this morning. they are still divided with different plans, different ideas how to get us out of the mess. >> didn't you both think maybe they got something, something happened. >> i didn't think there was a deal. >> i'm always the optimist. >> lots of ideas, plans, but no agreement. start there with the debt crisis looming, president obama, house speaker john boehner took their cases for getting a deal done directly to the nation. last night's prime time speeches

come as the nation is now one week, seven days, from the august 2nd deadline. a deadline that has been months in the making but congress still cannot get this fixed. congress now putting america's financial standing with the international community on the line and america's role in world markets on the line as well. the president arguing republicans just won't compromise, that their plan is to cut services for everyone, for the middle class, for lower income and save tax rates for wealthy americans while at the same time, protecting those wealthy americans. the president also said americans are just sick of the bitterness and divisiveness dominating washington. >> fed up with the town where compromise has become a dirty word. they work all day long, many of them scraping by, just to put food on the table and when these americans come home at night, bone tired, and turn on the news, all they see is the same partisan three-ring circus here

in washington. they see leaders who can't seem to come together and do what it takes to make life just a little bit better for ordinary americans. they're offended by that and they should be. >> and house speaker john boehner spoke after the president spoke and said the solution is not complicated. the nation needs to spend less. get most if not all economists agree debt reduction cannot occur without at least some revenue increases that means closing loopholes or eliminating credits or raising taxes. last night speaker boehner stuck to the party line, no new taxes. >> the president has often said we need a balanced approach, which in washington means we spend more and you pay more. having run a small business, i know those tax increases will destroy jobs. the president is adamant we cannot make fundamental changes to our entitlement programs. as the father of two daughters, i know these programs won't be there for them and their kids unless significant action is

taken now. >> so a lot of influx this morning. we want to go straight to the white house with more on this, where dan lothian is standing by. again sounds like both sides are as divided as ever. what's the latest this morning. >> that's right. you saw there quite a high level of frustration, not only from the president, but also from speaker boehner. and you know, the president with the strong language talking about how, you know, americans did elect a divided government, but not a dysfunctional one. one of the things i found quite interesting is that they can't even agree on whether or not this is a stalemate. the president saying that there's a stalemate here, speaker boehner saying there's no stalemate because republicans have been able to pass legislation. so at the end of the day, what you have are two sides with two different plans and neither side happy with what the other is offering. >> we know what we have to do to reduce our deficits. there's no point in putting the economy at risk by kicking the can further down the road.

>> the sad truth is that the president wanted a blank check six months ago and he wants a blank check today. this is just not going to happen. >> so even though it appears that they are at this impasse or there's a stalemate, sources telling us that democratic leaders and republican leaders are working quietly behind the scenes hoping to figure something out. we don't know exactly what it is that they are pushing forward, but the hope is they can achieve something that's more moderate and certainly that can be done in quick order. >> how much of this hinges on the hundred plus house republicans who are saying no way, that they're not happy with what speaker boehner put forward for them? >> look, that is a big part of whatever takes place here, because they'rele really digging in. there's some house members who say no new taxes whatsoever, even on the wealthy americans, and the president saying that you need to get some kind of

revenue here in order to make the system work for the long term health of the economy. that's very important. what can they come up with that can woo over those republicans who are being very clear about not wanting those taxes to go up. >> dan lothian, thank you. all right. so the two plans on the table right, the democratic backed senator reid plan and the republican led plan from senator -- speaker boehner. let's begin with senator reid's blueprint, cuts $2.7 trillion over the next decade. a big piece is what senator reid calls the winding down of the wars in iraq and afghanistan. that will save $1 trillion. republicans have called that a gimmick, savings from wars that are winding down, even though by the way, the same savings were counted in some republican budgets. reid's plan would not reform or cut medicare, medicaid, social security. there would be no changes to taxes. it would raise the debt ceiling by $2.4 trillion.

that would be enough to fund the government through next year's election. now the boehner plan is more short term. it would raise the debt ceiling in two different steps. the first step would happen immediately. raising that ceiling by about a trillion dollars, would be accompanied by spending cuts of $1.2 trillion over ten years. that would get us to next year. right? when we would need a second vote to raise the debt ceiling again by another $1.6 trillion. now that second increase would be contingent on more cuts, another 1.8 there the in spending cuts that would have to be agreed to by a bipartisan committee. the second vote you guys, is the sticking point for the president and democrats. they say they don't want to go through this debate again. that the markets wouldn't want that. that it would be too politically complicated and, of course, ali and kiran, republicans say that's just politically inconvenient for a president trying to run for re-election. either way you look at it, still divided. but those are the two major plans on the table this morning. >> gives us clarity on that.

thank you. as we've seen over the past month the president has taken to the bully pulpit again and again to make his case a debt ceiling should include a mix of spending cuts and revenue or tax increases. last night he asked the nation to contact their members of congress and demand a fair compromise. >> if you want a balanced approach to reducing the deficit let your member of congress know. if you believe we can solve this problem through compromise, send that message. america, after all, has always been a grand experiment in compromise. >> call to action, the websites of several lawmakers including senate minority leader mitch mcconnell, house speaker john boehner, crashed because of the high volume of people trying to contact their members of congress. most of them are back up and running now. with the debt ceiling deadline approaching all morning we will be breaking down last night's prime time pitches and moving forward how a compromise happens in any way, shape, or form. in about 20 minutes, taking a look at how the markets may

react when we talk to ben white, a wall street reporter for politico. coming up in the next hour, the white house's take on house speaker john boehner's debt reduction plan when we talk with gene sperling, director of the national economic council and assistant to the president for economic policy. >> all this brings us to our question of the day. if you had the budget ax, i don't know if there is a budget ax, if you had one, what would you cut first and what would you keep? send us an e-mail, tweet, tell us on facebook. we will read your comments throughout the morning. you are good at giving us interesting suggestions. we're looking for your priorities. >> if you would rather use a scalpel, that's okay too. >> the power of the purse. if you could cut it, what would you do. >> what do you think is unnecessary or too big? i'm sure we're going to get a lot of different responses. hearing from the father of the norway terror suspect anders breivik. he said he's ashamed, disgusted by his son's killing spree and wishes his son had killed himself instead of killing so many people.

breivik appeared in court for a bail hearing yesterday. he's now claiming he had help from two terror cells to pull off friday's attacks. meanwhile, officials in oslo have lowered the death toll from the moss ker to 76. breivik's father, a retired diplomat, living in the south of france, says his son must be mentally ill. >>. >> translator: no i'll never have more contact with him. in my darkest moments, i think rather than killing all those people, he should have taken his own life. >> those are strong words from a father. >> translator: they are. thinking about what has happened i get so upset and i don't understand how something like this could have happened. no normal human being would do something like that. >> nearly 200,000 mourners filled the streets of oslo yesterday for a memorial service honoring the victims. singer amy winehouse being laid to rest in britain. a family spokesman says a small, private funeral is planned. early autopsy results on winehouse's body were

inconclusive. police are hoping toxicology results will help determine the cause of death. the 27-year-old singer was found dead in her london apartment on saturday. winehouse shot to stardom several years ago but her enormous talent was often overshadowed by her drug problem and erratic behavior. her record has soared on-sites. >> her album "back to black" where songs like "rehab," sales are skyrocketing of them. starting today, locker rooms will be open, the season is saved and the teams can start making moves. today the nfl players and owners agreed to a new ten-year labor deal. someone agreed to a deal. on ending the four and a half month lockout. the players association head said the changes make football better and safer. the teams will cram a month's worth of work into a week. this is volunteary training. teams can make trades and sign

draft picks. cutting people right and left. teams can begin signing the 545 free agents out there. the league year will begin by august 4th and teams must be under the salary cap by them. >> are negotiators free to go to washington and help out in the budget deficit? dramatic developments in the dsk rape case. more of the interview with the maid who claims she was raped. new information about a lawsuit now against the former imf boss. thousands of small town post offices on the chopping block. could yours be one of them? where you could be dropping off your mail in the future? we'll have that when we come back. 12 minutes after the hour. with diabetes, it's tough to keep life balanced. i don't always have time to eat like i should. that's why i like glucerna shakes. they have slowly digestible carbs to help minimize blood sugar spikes, which can help lower a1c.

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because it offers a superior level of protection and because u.s.a.a.'s commitment to serve the military, veterans, and their families is without equal. begin your legacy. get an auto insurance quote. u.s.a.a. we know what it means to serve. welcome back to "american morning." 15 minutes past the hour. lawyers for dominique strauss-kahn are firing back at the hotel maid who came out publicly about her claims that the former imf chief sexually assaulted her.

>> her name is nafi diallo, granting interviews to "newsweek" and abc news and now cnn has learned she's planning on taking new legal action against dsk. alina cho spoke with diallo's attorney. >> what a difference a couple days makes. remember the public didn't know her name 48 hours ago. this case certainly has changed dramatically over the past 48 hours. this week the alleged victim nafissatou diallo broke her silence and now cnn has learned that lawyers for diallo will file a civil suit against dominique strauss-kahn this week. now a source close to the investigation tells me that the lawsuit does not set a specific dollar amount, at least not yet. now diallo's attorney, kenneth thompson, tells me the suit will focus on a key piece of evidence, namely, where the alleged sexual assault ended. listen carefully now. thompson says that it ended in a

dark, narrow corridor near the back of strauss-kahn's suite at the sofitel. not in a bedroom, not on a bed, not even on a couch, proving thompson believes that the encounter could not have been consensual, as strauss-kahn's lawyers contend because that would have been where a consensual encounter would have occurred, a bedroom or bed. strauss-kahn's lawyers will argue against that. remember, in a civil suit, the legal bar is far lower, with a criminal case it's proof beyond a reasonable doubt. in a civil matter, it's preponderance of evidence, meaning, was it more likely than not to have happened. again, a much lower legal bar. of course, there are lots of questions flying about whether the criminal charges will be dropped. >> right. and i think he's in court next week? >> august 1st. >> on the criminal case. >> that's right. and you know, the d.a.'s office, as you might imagine, not saying a lot about it, remaining tight lipped. officially the criminal case is still pending. it has not been dropped.

as for what is next, a source close to the investigation tells me that diallo, her attorney, and prosecutors, will meet tomorrow. as ali mentioned, dominique strauss-kahn's next court appearance is august 1st. in the meantime as you know, he is a free man, released from house arrest earlier this month. >> diallo spoke out last night about the incident with dsk. what was she saying? >> it's interesting. she granted two interviews, one print, one television to abc news and "newsweek," hitting back, pretty hard, against detractors who say the 32-year-old immigrant from guinea is lying about the accusations that 62-year-old dominique strauss-kahn tried to rape her. listen. >> he come to me and cup my breast. no, you don't have to be sorry. i said, i don't want to lose my job. he push me like this to the floor. i cannot move. i cannot move. i try. >> diallo, of course, speaking to abc's robin roberts and said

she did not know who strauss-kahn was at the time of the alleged assault, but once she found out she said she feared for her life. >> i was watching in the news and then they say he's going to be the next president of france. and i say, oh, my god. i was crying. i said, they're going to kill me. i said they're going to kill me. i'm going to die. >> interesting, certainly brings a different dimension to the story, of course, now that we've seen her, heard from her. the question is, will the court of public opinion work? >> his lawyers are saying this is just another staged event. >> that's right. the back and forth on this is pretty interesting. they say she is the first accuser in history to wage media campaign like this in the middle of a criminal case and she's out for money. diallo's lawyer counters saying this is the first time he's heard of a rape victim being called a prostitute, a hooker and a con artist by the

mainstream media. he calls it damaging, false information, that he says he strongly believes was leaked by the manhattan d.a.'s office. the back and forth continues. we certainly will keep you posted on all of the developments. >> we spoke with the "newsweek" editor who did an interview and wrote the piece and told us yesterday he found her story believable and consistent. >> its was a thorough, thorough piece. >> alina cho, thank you. >> you bet. thousands of small town post offices may not be around much longer. today the u.s. postal service will release a list of over 3600 post offices that could be shut down. a spokesman says most are in smaller communities that aren't as busy and aren't making a lot of money. some people say they'll have to make a 20 mile round trip to mail a letter. in some areas they plan to partner with local businesses, mom and pop shops, to drop off your mail in their absence. >> jacqui jeras in the extreme weather center for us. what a turn around one day makes. we're in triple digits and then yesterday i needed a sweat shirt. >> i know, right?

it's kind of dreary in new york and all across the northeast. take a look, not a lot of rain, but the clouds going to help keep it a little cooler throughout the day today as well. we will see some more showers and thunderstorms develop this afternoon. some of those could be severe. mostly across parts of new england as well as the upper midwest. not anticipating severe across the southeast, but we're going to see a lot of heavy downpours associated with this, especially along the gulf coast. temperature wise, yeah, you're in it once again. here we go. same old sad song across the plains states. kansas city, back in the excessive heat warnings and dallas looking at so many days now, 106 yesterday, going to get close to that once again for today. feeling good in minneapolis at 84, chicago not bad either, and there you see the cooler temperatures across the northeast. so enjoy it, guys, while it lasts. >> we will. all right. thanks so much, jacqui. up next, thousands of scientists, engineers and computer specialists at the faa, furloughed. dozens of major aviation projects stalled.

why? congress couldn't get its act together. that's why. we'll tell you about it. >> having an impact on your air fares as well. hollywood is calling the story of 33 chilean miners is headed to the big screen. we'll tell you about that. [ male announcer ] get ready for the left lane. the volkswagen autobahn for all event is back. right now, get a great deal on new volkswagen models, including the jetta, awarded a top safety pick by the iihs. that's the power of german engineering. hurry in and lease the jetta s for just $179 a month. ♪ visit vwdealer.com today.

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minding your business. a big report out from pew research says the recession widened the racial wealth gap and hispanic americans hit hardest. they dropped 66% between 2005 and 2009. both much worse than white households which lost 16%. a check in on the markets right now, u.s. stock futures trading pretty flat, only slightly higher, investors

waiting on several economic reports on housing and consumer confidence coming out later this morning. wall street also watching capitol hill closely today, for any updates on the debt ceiling debate. shares of bp and swiss bank slipped in overseas trading. that's part of what's pushing european markets lower this morning. bp reported a huge profit of more than $5.5 billion for the quarter. many more earnings reports coming out, 41 s&p 500 companies expected to report quarterly earnings today. ford, eastman kodak and radio shack will report before the opening bell, amazon, glaxo smith kline and others report their earnings later in the day. dunkin' donuts leads the list of companies expected to file for an initial public offering. 11 companies are expected to file for ipos this week, that is the most in one week since 2007. a healthy happy meal, what mcdonald's is going for. the giant will announce later today it's adding vegetables and fruits to its happy meals, also cutting back on the amount of

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past the hour. time for our top stories this morning. president obama and house speaker john boehner both laying out their cases for getting a deal done on trying to raise the debt ceiling. last night the president called on the nation in a prime time address to pressure their congress members to work out a deal. then later, speaker boehner

accused the president of being uncompromising. norway massacre suspect anders breivik claims he worked with two terror cells to pull off friday's deadly attacks. the number of dead has now been lowered to 76. breivik's father is also speaking out for the first time saying he wishes his son had just killed himself instead of taking the lives of so many others. football is back. the lockout is over and the free agency frenzy begins. nfl players and owners finally agreed to a new ten-year labor deal yesterday that ends the 4 1/2 month lockout. locker rooms will be open today. congress strikes again. the federal aviation administration forced to furlough thousands of employees, dozens of projects on hold because of bickering lawmakers. air traffic controllers will remain on the job but nearly 4,000 faa workers, mostly engineers, computer specialists and scientists have been told to stop reporting to work. the reason effort fos renew

funding for the faa hit a stumbling block when house republicans tried to make it harder for air and rail workers to unionize. the impact this will have on you when you fly in our 8:00 hour. dramatic rescue captured the world's attention now the story is headed to the big screen. "hollywood reporter" says mike medvoy who produced "black swan" bought the movie rights. the miners were trapped underground for 69 days before being rescued. production set to begin next year. i remember watching "black swan" making me feel like i had been trapped somewhere for a long time. poke my eyes out. >> whereas others enjoyed that film. >> i don't know that i've hated a movie more in my entire life. >> speaking of poking your eyes out -- >> was that editorializing? >> not at all. >> speaking of poking your eyes out,back to our top story, the federal government a week away interest being unable to pay its bill. the blame game in prime time.

>> but the new approach that speaker boehner unveiled today, which would temporarily extend the debt ceiling in exchange for spending cuts, would force us to once again face the threat of default just six months from now. in other words, it doesn't solve the problem. >> joining me live from arlington, virginia, ben white, the wall street correspondent for politico. ben, what plan is better for wall street? is it really true that they have to clear this up so it's not hanging over the markets and an election, or is the boehner plan better for wall street? >> it's not really true. we've dealt with plenty of short-term debt ceiling hikes in the past. it's true for obama politically he absolutely doesn't want to deal with this again next year. but i think he has one advantage in his argument and that's that the rating agencies, particularly standard & poor's v said they would like to see a plan more like senator reid's that gets into next year, into 2013 and has immediate spending

cuts. boehner has a problem there, if the rating agencies are behind the reid plan or something similar to it, it's harder to sell this two-step process which i think would not please a lot of people on wall street and americans frankly who don't want to deal with this anymore. what obama was trying to do last night was play to that broader american electorate that says let's move beyond this. what he didn't do is say how i'm going to get that done. i think people would have been a little disappointed in his talk about shared sacrifice and corporate tax increases, maybe they agree with those long term, everybody knows that's not going to be part of the debt ceiling deal so tell us how are you going to fix this and he didn't do that. >> there's a new player in this whole game, that's global markets. so far, we've seen global markets nervous, cautious, but not necessarily too royaled by what's happening in washington. at what point does that change? >> it could change late in the week if there's still this partisan train wreck and no clear vehicle in the house and senate to produce legislation the president can sign, i think you could see, you know,

securities start to sell off a little bit, see the yield in the ten-year treasury notes start to go up. you've seen only limited reaction so far, some safe haven move into the swiss franc and the dollar keeps going down. the markets are handling it. still think a deal will get made. even if it doesn't happen by august 2nd nobody really on wall street believes that's the absolute drop dead date. if there's progress by then, something is going to get done, treasury will figure out a way to keep the lights on and bills paid a few days after that. that's a political date. >> i've heard a few pretty cynical market participants saying if there was just a big stock market sell-off these yo-yos would maybe get their act together and find compromise. the markets being relatively calm works in their favor for more stalemate. >> yeah. that's probably true. i think you're right, we might need to see that t.a.r.p. moment like in 2008 where the dow sold off 700 points when republicans voted down the wall street bailout and then, you know, they

changed their minds and said maybe we should do that. it may take thursday or friday of this week, if it's a total crisis and no progress being made to see a sell-off in the markets for, you know, people to get off the partisan high horse and say all right, none of us will get what we want here, we have two different ideas of how to fix the budget problem long term, not going to settle that right now, maybe settle it in the election, maybe we won't, but let's raise the debt ceiling and get about their summer and have a vacation and stop talking about this. >> what kind of message is it sending to the snrl investors who buy up u.s. treasury bonds, the first thing they go into when looking for a safe haven or looking for a place to park their country's assets? what kind of message is it sending? >> it's worrisome, i think, to some. obviously you've heard china say please get your act together and deal with this. in that case, somebody as big a holder of treasury debt as china, don't have anywhere else to go, stuck with us. >> they don't want to hurt their investment too. they have such a big investment

in the u.s. >> it's not going to happen. most foreign governments, at least at this point, big holders of treasuries, know we're good for the money and have these fights periodically, some are worse than others, we always manage to resolve them, even though we do it in a way that might embarrass us before the world, but we get it fixed. there's no panic, i don't think, among the big holders. maybe a little so with the margins than in more recent debt ceiling debates but nothing big, nothing that's going to be a huge crisis for anyone yet. >> the idea of permanently raising interest rates by having a downgrade of your debt and companies having to pay more to borrow money, i think -- >> not good. >> just not good. you're right. and the fact that it's all caught up in partisan wrangling is what i think really infuri e infuriates americans. >> yeah. i think so too. at this point, i think people would have been disappointed by the two speeches last night, particularly because it was just such partisan rhetoric. we know boehner doesn't want tax increases. we know obama wants to get new revenues. you guys figure that out long

term. i don't want to worry about my investments going down, my 401(k). i don't want to worry about the treasury bonds i own not getting paid. fix it and you guys want to fight about the big stuff, we want you to, but not in the context of holding the full faith and credit of the united states at risk. >> here here. ben white, thanks so much. the wall street correspondent for politico. nice to see you this morning, ben. >> thank you for having me. >> coming up next an amazing tale of survival, four teens mauled by bears in the alaskan wilderness. hear from one of the victims who thought he was going to die. he was bitten in the head by a bear but managed to get to escape. >> mariah carey's return to tv. her appearance since giving birth to twins. someone give her a reality show right now. you will see some of the highlights. you are watching "american morning." my doctor told me calcium is best absorbed in small continuous amounts. only one calcium supplement does that in one daily dose. new citracal slow release... continuously releases calcium plus d for the efficient absorption my body needs.

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welcome back to "american morning." a colorado teenager is telling the world what it's like to be mauled by a bear. sam gottsegen and six other teenagers had a run-in with a bear and her cubs saturday in the alaskan wilderness. the young men were 24 days into

a month-long sur vifbal camp, two hours north of anchorage where they encountered the bears during a hike along a river. >> i thought i was going to die when i was attacked. i was so scared. we saw the first person go around the corner and yell bear and started running backwards, and i looked behind me and the bear was behind me, so i started running down the hill. it tackled me on the way down. >> he was bitten in -- on the head and the scalp, but it didn't puncture the skull. i was able to talk to sam so that was wonderful. i didn't know until then he was really okay. >> gottsegen's condition has been upgraded from serious to good. he suffered a punctured lung, broken ribs, a severe head wound, two other teens suffered life tle-threatening injuries a remain hospitalized this morning. certainly a survival skills camp where survival skills is what they needed. >> amazing. the dream act is now a reality in california.

governor jerry brown signs the measure, signed it, provides undocumented immigrant students the ability to also qualify for the cheaper tuition rates that in state schools provide. immigrants who enroll in the program will have to file an affidavit stating they've applied for legal immigration status. family feud brewing over plans for michael jackson tribute show. his brothers marlin, tito and jackie, sister la toya and mother catherine there for the announcement of the show scheduled to be held in wales in october. the acts being kept secret but jermaine and randy weren't there, were against the show because it's scheduled to happen during the criminal trial of the doctor accused in michael jackson's death. forgive her if she's rusty. ma ri yeah carey took up two hours on sunday night, her first appearance since giving birth to her twins. here's a look. >> i don't know where to look at you. like 20 zillion cameras here. i'm looking at four -- there's

five. it's like -- i didn't know there was math involved. if you can go up and can we see. not to dictate shots. sorry. giving you moments. please, you guys, go to a close-up of the side where the gold is. >> can you see that right there? >> these details were really super important to me. if you can go down. cut away from me so i can put this on. can you put this on. >> don't show that. >> my microphone just fell off my body. >> she should be a director. >> right. >> she's calling -- >> home shopping network host working with her that day. >> we should show people, i don't know if kelly -- is its kelly or phil? are you in there? phil, camera three over here, take a look at us on three. everybody look at three. >> just me. >> look at -- there's -- now let's go over to six. all right. that's six. now we have two. >> ali is drunk with power. >> that's two. and this is camera one.

and phil, they tell me there's another camera in here somewhere. >> the steady cam back there. you don't have to unhook. >> it's kind of fun. >> this is what got stuck with her. >> this fell out and then we have our mikes and all this kind of stuff. >> your first look at mariah carey after giving birth and two hours on the tube. >> probably sleep deprived, twins, 3 months old. >> little more complicated than made out to be. >> there you go. >> thanks, phil, thanks guys. >> quick check of your top stories is straight ahead. >> and somewhere ricky bobby is smiling, a baptist preacher delivers a pre-race prayer to nascar fans right out of "tall day ga nights." . >> thank you for the fords, thank you for sonoco racing fuel.

a look at your headlines this morning. president obama calling on the nation to pressure their elected officials to work out a debt ceiling compromise. the challenge came during the president's prime time speech last night. the government has just seven days to raise the debt ceiling to avoid a potentially devastating default. massacre suspect anders breivik claiming he worked with two terror cells to launch friday's attacks in oslo in order to prevent muslims from colonizing norway. the death toll from the bombing and summer camp ambush was lowered this morning now to 76.

a private funeral being held today for amy winehouse. an early autopsy on the 27-year-old singer was, quote, inconclusive. police are still awaiting the results of toxicology tests to determine the cause of death. thousands of small town post offices now on the chopping block. the post office says it they're under review and may be shut down because of budget woes. locker rooms open today after the nfl players and owners signed a deal ending a 4 1/2 month lockout. a frantic race to sign your favorite players is also under way. you're caught up on the day's headlines. "american morning" is back right after a quick break. [ male announcer ] megared omega-3 krill oil from schiff.

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president obama asking americans to demand their elected representatives reach what he likes to call a balanced compromise. >> different from a balanced budget. >> when it comes to raising the debt ceiling. balanced means cuts and also revenue increases. right now there are a number of plans in play. the two latest include $1.2 trillion in immediate discretionary cuts. we want to know if you had that budget ax or the scalpel, what would you cut first? what would you keep? what is expendable is our question of the day? >> we want to read some of the e-mails. joshua from facebook writes -- medicare, medicaid, defense and debt maintenance those are the areas i would focus on. >> snow on facebook says --

in other words, wouldn't touch veterans benefits. >> a lot of saying that, active duty military should be paid, veteran benefits continue. arty on twitter -- oh, no, we're talking about -- we're talking about taxes and spending here. >> we talk endlessly about tax increases, spending cuts, balances. i but i think he's meaning the general view. >> his hashtag greedy on there too. keep your comments coming, send us an e-mail, tweet, tell us on facebook we'll read your thoughts later in the program. as a rule, invocations are fairly solemn recitals, a prayer at the beginning of something. >> not this past weekend. nascar nation treated to perhaps the best pre-race prayer ever. one that would make ricky bobby proud. >> reporter: it was the best of

prayers, it was the worst of prayers. >> lord, i want to thank you for my smokin' hot wife tonight. >> reporter: it was a prayer unlike any other. >> lord in heaven. >> hail mary full of grace. >> reporter: this prayer was full of cars. nascar. >> we want to thank you tonight for these mighty machines that you brought before us. >> reporter: baptist pastor joe nelms in nashville giving the pre-race invocation. some are calling its first sponsored prayer. >> thank you for the dodges and toyotas, thank you for the fords, thank you for sunoco racing fuel, and goodyear tires. >> reporter: as one critic posted on youtube, i am certainly not a religious man but i'm pretty sure product placement in a prayer equals a straight ticket to hell. the pastor isn't bothered. >> i can assure you there were no endorsement deals but i am not against them. any of them that want to send some money to our church we'll be happy to use it. >> reporter: wait until you hear

how he ended the prayer. >> in jesus name, boogity boogity boogity amen. >> reporter: what does boogity mean? >> it means get after it boys. >> reporter: the catch phrase used by a well-known nascar announcer to start a race. the prayer started critics engines. it's making a mochrie of prayer. he's just being a clown. he is being sacrilegious. pastor nelms said he wanted to get folks who don't go to church thinking. >> maybe not all christians are stick in the mud. >> reporter: admirers called its best prayer ever. this is awesome. putting the fun back in fundamentalism. >> lord i want to thank you for my smokin' hot wife tonight, lisa. >> reporter: that's smokin' hot wife part, sure rings a bell. will farrell playing driver ricky bobby. >> dear lord, baby jesus. >> reporter: thanking the lord in "talladega nights." >> and of course my red hot smokin' wife carlie who is a

stone cold fox. >> reporter: pastor nelms confesses he recently saw "talladega nights" on tv and got the idea to use it. as for his wife, she said this to someone who called to complain about the prayer. >> i'm the smokin' hot wife and i don't care how many times he says it to a big crowd or small crowd i'm enjoying it. >> reporter: this pastor has no issue with the separation between church and track. jeanne moos, cnn. >> in jesus name, boogity boogity boogity amen. >> reporter: new york. >> the drivers are trying not to crack up during the invocation. >> another reason to dust off "talladega nights" and watch that again. >> that's right. >> as if you need a reason. >> funny. >> i would rather listen to that than listen to another minute about the debt ceiling personally. >> we're doing most of the talking about the debt ceiling. >> i take that back. >> oh well. prescription drugs that millions use every day are about to go generic and get drastically cheaper. it could save americans -- save the world, people who buy these medicines a quarter of a

trillion dollar globally. elizabeth cohen has the details live in our next hour. thanks to the venture card from capital one,

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one week left until the debt deadline. president obama takes his case to the nation saying end the gridlock or suffer the consequences. >> house speaker boehner offers his own plan during his own speech showing just how dangerously far apart they still are. >> and which the arguing starting to sound more like a full blown political campaign, are lawmakers more worried about 2012 than they are about august 2nd? it's your money, your vote, on this "american morning." good morning. it is tuesday, july 26th. welcome to "american morning." we would love to tell you it's all over and there's been a

deal, but -- >> in fact, if you listened to the president and house speaker, they didn't even sound like they were talking about the same thing. >> no. >> but for a prime time address and blame game over raising what's essentially the nation's credit limit with seven days until the deadline there's no compromise in sight to ensure that america's creditors will still be paid. right now congress is putting america's financial standing and its role in the global markets on the line. last night president obama ripped into the house republicans' plan to raise the debt ceiling with the cuts only approach. he argued their refusal to consider eliminating tax breaks or loopholes for the wealthy will backfire with ordinary americans. >> they're fed up with the town where compromise has become a dirty word. they work all day long, many of them scraping by, just to put food on the table and when these americans come home at night, bone tired, and turn on the news, all they see is the same partisan three-ring circus here

in washington. they see leaders who can't seem to come together and do what it takes to make life just a little bit better for ordinary americans. they're offended by that. and they should be. >> okay. house speaker john boehner spoke after the president and said the solution is not that complicated just spend less. most economists, if not all economists, agree debt reduction can't really occur from where we are with at least some revenue increase or the closing of loopholes or the increasing of some taxes. last night speaker boehner stuck to the party line, though, no new taxes. >> the president has often said we need a balanced approach, which in washington means we spend more and you pay more. having run a small business, i know those tax increases will destroy jobs. the president is adamant that we cannot make fundamental changes to our entitlement programs. as the father of two daughters i know these programs won't be there for them and their kids unless significant action is taken now.

>> all this talk about how to get our future spending under control, but this, the debt ceiling, is about what congress has already passed. >> already passed billions of dollars in spending. >> however -- >> paying for it. >> the gop will argue the tea party response to that is, we can't keep doing what we're doing. >> totally good argument. >> solid argument. >> don't tie it to this. there's no -- >> that's the leverage they're using. >> never going to get tired of saying it's apples and shampoo. >> and you use a lot of shampoo to keep your hair like that. >> correct. >> i eat a lot of apples. >> a lot in flux this morning. to the white house where dan lothian is standing by. both sides sound divided as ever and we're running up now seven days until the august 2nd deadline. >> that's right. i think what you saw last night from both the speaker and from the president is a level of frustration. i'm not certain that anyone really thought that they would be at this point and still have such a wide divide between two plans, essentially what the

democrats are pushing, what the republicans are pushing. just a couple of days ago, i was talking to a senior administration official who pointed out that they thought they were close to a deal over the july 4th weekend, and so here they are, and what you have is the democrats looking to get some kind of plan that would raise the debt ceiling through the end of 2012 and the republicans, john boehner, pushing this plan that would essentially do it in a two-tier system. john boehner, though, doesn't necessarily have the support of his own party, everyone in his party, already some republicans pushing back saying they don't wholly embrace his plan. so it is even though it appears that there is this impasse, we are told by democratic and republican sources that there is an ongoing discussion quietly behind the scenes and the hope is some sort of moderate approach can be found, some compromise, and that can be done in time. >> we know what we have to do to

reduce our deficits. there's no point in putting the economy at risk by kicking the can further down the road. >> the sad truth is that the president wanted a blank check six months ago and he wants a blank check today. this is just not going to happen. >> reporter: one of the things i found kind of interesting they can't even agree on whether or not there is a stalemate. you heard the president last night talking about this being -- reaching a stalemate. speaker boehner saying there's no stalemate because republicans have been able to pass some legislation. but the question is whether or not they can find a compromise that can get bipartisan support before that deadline expires. back to you guys. >> the process is just killing us, dan. it's killing us. >> i know. sounds like a broken record. >> it does. >> not much has changed. hearing that republicans are, you know, don't want these tax cuts for the wealthy, that's been the narrative all along over the last six months.

not a lot has changed. there's a lot of hope, though, that some kind of agreement can be made. >> it's gone past the democratic process into silly town. >> pushing my ability to make the story sound different every day. >> mine too. >> good to see you. do it many times over and over again. >> as we've seen over the past month, we've had the president taking to the bully pulpit again and again to make his case that a debt ceiling deal should include a mix of spending cuts and revenue increases. aka taxes. last night, he asked the nation to contact their members of congress and demand a fair compromise. listen. >> if you want a balanced approach to reducing the deficit, let your member of congress know. if you believe we can solve this problem through compromise, send that message. america, after all, has always been a grand experiment in compromise. >> the call to action from the president, after that, the websites of several lawmakers

including senate minority leader mitch mcconnell and house speaker john boehner crashed. the websites crashed because of the high volume of people trying to contact their members of congress. let's get the administration's response. joining me live from the white house is gene sperling, the director of the national economic council. he is an assistant to the president for economic policy. gene, good to see you. thank you for joining us this morning. >> thanks for having us. >> gene, let me ask you this, i want to have a slightly different discussion with you here, that is with you, you work in the treasury, worked in the white house before, an adviser to the president, at this point, you have got to be looking at contingency plans for this debt ceiling that we're going to start to hit on august 2nd. what are those contingency plans? we've heard the treasury secretary refer to some of them, we've heard the federal reserve saying it's got -- it's getting ready with emergency plans. you in the white house are going to have to make choices as to who gets paid on august 3rd. what's the point about not having a solution to this? >> you know, of course that type of planning goes on, but ultimately that's not where our focus is.

anything that would happen in a situation where we would be at or near default is unthinkable. and there shouldn't be any leader or policy maker in washington today that is even contemplating that. the president said last night was, we have to make a strong impact on reducing our deficit that requires balance, that requires shared sacrifice, that to avoid us being in this unprecedented situation of putting at risk the first default in our country's history, we got to compromise. every american understands that. no my way or the highway approach. when we extend this debt limit, we need to take away the cloud of uncertainty that's been hanging over our economy by saying quite simply, we are no longer going to use the threat of default, of the first default in the history of our country, as a normal type of routine bargaining chip in our budget negotiations. that is not good for the american people. it doesn't honor the legacy

alexander hamilton started over 200 years ago. >> for markets out there you have a plan, you can tell me there is a plan if the house doesn't come to some agreement on this? >> well, of course there is always contingency planning going on, but i will tell you, there is nothing that's not unthinkable. the only thing that is thinkable is the common sense compromise the president discussed. we have come so close. the president has been in bipartisan negotiations three times and had the republican leadership walk away abruptly. we have been very close. there is a lot of goodwill that i still believe exists in this country in washington and we just need a basic, a minimum amount of compromise, a minimum amount of not my way or the highway and we can get there easily this week. >> the president said, in fact, last night, he said, that his original plan which would reduce the deficit by about $4 trillion over ten years is bipartisan. in fact, he said there are many republicans in the senate willing to support it. how many?

enough to get this passed? >> i think what the president is referring to is, for example, when the gang of six came out with a proposal, that was balanced, that supported something like the bipartisan fiscal commission's plan, 15, 16 republicans said they could support that even though that called for far more revenue increases as part of tax reform, far more than the president was calling for. so the president has gone the extra mile repeatedly, not to put out his ideal proposal, but to make compromises to push his own party to go further on entitlement reform and we can reach common ground. there is no reason we can't compromise in this country. that's what the president said yesterday. that's what the public is responding to. that's what our focus should be on this week. >> gene, again, you've been in the treasury, you've been in the white house. somebody is going to have to start making decisions and i assume these decisions are being made now, more speculation about what happens to the very -- the $22 billion in social security

checks that have to go out on august 3rd. what's your update on that? are social security checks going to go out on august 3rd if a deal is not reached by august 2nd? >> you're making my point. there is no option that is really not unthinkable, that would not do significant damage to our country if people in washington cannot come together and find that basic compromise. we all know the facts that what will happen after august 2nd. we all know the treasury has over $500 billion in debt maturing in august, that they have over 80 million checks to write to people who depend on things like social security. there's no way we should even get near that. that's why the president went on national tv last night. it wasn't a plea for his particular plan, for his ideal program. it was a plea for bipartisan compromise, for balance, for shared sacrifice, for everyone putting, checking at the door any kind of my way or the highway approach. he's demonstrated that.

you've seen him push his own party on deficit reduction. you've seen him put on the table things that are difficult for any president, particularly a democratic president, to do on entitlement reform. he's done so because he's trying to bring the deficit down. but he's also trying to show, as he said last night, that the divided government doesn't have to be dysfunctional government. >> gene sperling, thank you for joining us. gene sperling the director of the national xhik council and assistant to the president for economic policy. >> it's all about august 2nd, that's the deadline to raise the debt limit. we hit the debt ceiling may 16th, treasury has been doing some magic to make it last this long, but august 2nd is the deadline to raise that debt limit. >> keeping another date besides august 2nd and that's election day 2012. jim acosta is live in washington with a look at the possible political fallout for both sides. you can imagine social security checks don't go out august 3rd, who gets blamed? >> they're all going to get blamed for that, kiran. actually, as you've been saying,

six days and counting on the clock, little progress in the negotiations after what was more of a state of the disunion last night, the president and house speaker john boehner brought more talking points than proposals in their competing addresses to the nation and later this morning speaker boehner meeting behind closed doors with weary conservative republicans so sell his plan on the debt ceiling. i talked to or got a quote from a spokesman in boehner's office who tells cnn we are moving forward wednesday with a bill we think the senate can pass and the president should sign. that is an optimistic assessment from the speaker of the house. votes could come wednesday, as early as wednesday, and the boehner plan and dueling proposal harry reid as the president mentioned he does support but it's not clear if there's enough time for the congress to work through these competing plans before august 2nd which means the country would be at risk for default and that could mean as we were talking a few moments ago, big

trouble for both parties, a recent cnn poll/orc poll shows the public is frustrated with democrats and republicans. check this out, is president obama cooperating enough with republicans in congress? 42% say yes, 57% say no. that sounds pretty serious, right? well check out what happens when we ask are republicans in congress cooperating with the president? 30% say yes, 68%, that is more than two-thirds of americans, say no. so the indications are there that if this goes to the brink and beyond, that republicans could get blamed more than democrats, guys. >> all right. jim, thanks very much for that. coming up in about 20 minutes, we're going to get reaction to last night's debt sales pitches. we talk to ron brownstein and norman onstein a scholar at the american enterprise, two guys who have been around the block

with political wrangling and will give us real clarity on where to go from here. >> still to come, norway massacre suspect anders breivik claiming he had help planning the attacks and stunning comments from the suspect's father. but not your wrinkles. new neutrogena® rapid wrinkle repair. its retinol formula smoothes wrinkles in just one week. why wait if you don't have to. neutrogena®.

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suspect anders breivik now claiming he worked with two terror cells to launch friday's attacks as well as terror cells abroad. his attorney says breivik used some kind of drugs before the bombing and mass shooting to keep him strong and awake. here's the attorney speaking just a short time ago. >> he talks about two cells in norway, but several cells abroad. he says that he is sorry he had to do this, but it was necessary to start revolution in the western world. >> meanwhile, the death toll from the slaughter has been lowered to 76, although it could rise again. there are still people in the hospital. nearly 200,000 people attended a memorial service yesterday in downtown oslo. that city's mayor vowing to

punish the suspect with, quote, democracy and love. we're going to get a check of our national weather this morning. jacqui jeras is in the extreme weather center for us. good morning, jacqui. >> good morning, guys. kind of a dreary start in a lot of cities across the eastern seaboard. not a lot of rain going on but a lot of cloud cover. stray away from your tv, come over and take a look at this power cam from atlanta. isn't that a cool picture? the clouds cutting off the top of the building and when you see things like that we start getting worried about getting airport delays. 74 in atlanta, showers and thunderstorms expected this afternoon. all across the southeast, heaviest along the gulf coast and we could get as much as two inches per hour. not severe here but this is where we're expecting it across the upper midwest. moderate risk through the dakotas and new england could see severe thunderstorms this afternoon as well. outside of those storms, the heat continues to be a top story in the weather department with advisories in effect across the central part of the country again. day 24 now for you for dallas,

that's the fourth longest streak of 100 degree plus days and looks like we could break that record by the end of the week as you stay in those triple digits. back to you guys. >> jacqui jeras, thanks, jacqui. our question of the day pegged off president obama demanding congress come up with a deal to allow the government to keep borrowing money and pay debts after next week's deadline. we want to know from you, if you had the budget ax what would you cut first and what would you keep? send us an e-mail, tweet, tell us on facebook. >> don't forget what would you keep part. we got interesting comments about what you want to cut. what do you think is essential. we're going to take a quick break. we'll be right back.

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the racial wealth gap and hispanic americans were hit hardest. median household income for that group fell 66% from 2005 to 2009 and black households lost 53% of their net worth. both much worse than white households who lost 16%. right now u.s. stock futures trading flat, only slightly higher right now. investors waiting on several economic reports, on housing, consumer confidence, those due out later this morning. wall street watching capitol hill closely today for updates on stalled debt ceiling talks. just a few minutes ago, ford announced second quarter earnings that were better than wall street had been looking for. a net income profit for the last quarter dropped about 7% from the same time last year, but sales, sales climbed 13% to $35.5 billion. and earlier, oil giant bp and the swiss bank ubs reported their earnings, missing wall street estimates, pushing european stocks lower.

get this, about bp, bp still reporting a huge profit of more than $5.5 billion for the quarter. bp, yes, that bp. many more earnings reports coming out, 41 s&p 500 companies expected to report quarterly profit reports this afternoon or this morning. eastman kodak, radio shack report before the opening bell, amazon, glaxosmithkline report later today. dunkin' donuts leads the long list of companies expected to file for an initial public offering. 11 companies are expected to file for ipos this week, the most in one week since 2007. don't forget for the latest news about your money check out the all new cnnmoney.com. "american morning" will be back right after this break. with diabetes, it's tough to keep life balanced.

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this is cnn breaking news. >> 28 minutes past the hour. we are getting new news this morning, just in to us, about the norway terror attack. the attorney for the suspect, anders breivik is saying his client was on some kind of drugs to stay awake and alert during his killing rampage friday. >> he says breivik claims he had help from terror cells in norway and abroad with the attack that authorities say took 76 lives. michael holmes has more on these developments, live in oslo this morning. michael, first of all, what do we know about whether or not he acted alone or had help and what has he said about this? >> it's very confusing, ali. this is a guy who told the police initially he acted completely alone and now he's saying he had contacts with two or terror cells outside of his

own. what's not clear, it appears he's saying he acted alone in these attacks but he has contacts with these other cells in a broader sense. you know, there's a lot of people who doubt this, actually, ali. the police have no evidence of contact with other cells, no evidence of other cells, and some people say this guy may be just putting on a bit of bra vaddo, trying to make himself look as if he's part of a bigger thing. police have to take it seriously and looking into it. this news conference with his lawyer was pretty instructive into the mind of this guy. he said that he feels that what he did was necessary in order to start a revolution in europe. remember, this is a guy who is vehemently opposed to muslim immigration in europe, what he calls a colonization of this country, and, indeed, western europe by muslims. he said it was necessary to start a revolution. he feels he's already in a war and he says this is a war that

will go on for 60 years and won't be until then that everyone understands. in terms of his own actions on friday, he apparently was surprised he even got to the islands. he was surprised he got away with it after the bomb had gone off in oslo. he says -- the lawyer says he shown no remorse for the victims because he believes he is in a war and shows hate toward anyone who believes in a normal political system. the lawyer said the whole case has indicated he is insane, he says it is too early to say whether insanity would be a defense in this case. remember, we have to make it clear, a guy who has admitted to these crimes, but has pled not guilty, ali. >> the response, michael, this is kiran here as well, the reaction time from authorities, i mean there are many of us scratching our heads saying how could he kill so many people. i know he was armed with this weapon that allowed him to discharge a lot, but to kill

that many people, without help being able to get to them? >> a lot of people are asking that question. it's a fair one. you got to understand a couple things. first of all, the island is a fair way from oslo, and the bomb had gone off and so all security had been diverted to this bomb going off here in the capital. there's even reports that some of the kids who called up for help from the island when the shooting started were almost put on hold saying, you know, if this isn't about the bomb we can't deal with it right now before they understood what was going on on the island. these are the things that delayed the reaction time and getting the distance to the island, local police found -- they didn't have weapons, the police are not armed, they had to get the s.w.a.t. teams there who had to drive there and get a boat across and the other thing that's sad about all of this, there's a helicopter base for police helicopters it was shut down for the vacation period. police are saying it was quicker

to get there by car anyway, but really, shut down for vacation? what you would imagine would be the fastest mode of transport to get on to the island itself, news helicopters over there before the police got there. there's other questions about like the body count revised down by so much, 93 to 76, like they apparently counted bodies twice. a chaotic scene as you can imagine. >> a country not used to something of this magnitude. it is a peaceful, open society, which is in the streets what people are trying to reclaim and say that is how they will fight back against this accused killer. tell us about the drugs that he took a drug, perhaps, to stay awake. what do we know about the mood or of this accused killer? >> we know nothing more than that. his lawyer said in the news conference he took a drug to stay alert and awake while he carried out this rampage. he wouldn't say what type of drug it was. you know, the kids, the

survivors, spoke about -- one child saying he was smiling during it. another one saying he had a very impassive face throughout it all and certainly methodical in what he did. you know, it's interesting when you talk about, you know, norwegian society and unarmed police, people here say even know, we don't want the police to be armed, we don't want to live in that kind of a society. it's a very peaceful place and very friendly place and people are stunned this could happen here. even police who are authorized to carry weapons in the car, have them in a locked box unloaded and have to get permission to pull them out. your average cop on the street has nothing which, of course, is very foreign to, you know, america. in places like this, they're proud of that and don't want a society that's, you know, got armed cops everywhere. this is a country, of course, as we've discussed before, does not have the death penalty and so that's also being controversial for outsiders. >> all right. thank you so much, michael

holmes. the father of norway terror suspect breivik says he's ashamed and disgusted by his son's killing spree and wishes his son had taken his own life instead of the lives of so many others. jens breivik lives in retirement in the south of france and said his son is mentally ill and the two have had no contact for 16 years except for a brief phone call ten years ago. >> no. >> translator: i'll never have more contact with him. in my darkest moments, i think that rather than killing all those people, he should have taken his own life >> translator: strong word from a father. >> translator: they are, but thinking about what has happened i get so upset and still don't understand that something like this could happen. no normal human being would do something like that. >> meanwhile, breivik claims he had help from two terror cells to pull off friday's massacre and terror cells abroad as michael holmes reported this is convicting information than what he gave police earlier and there's some people who don't believe that to be true. >> searching for grandiosity in

the wake of this tragedy. we're following breaking news this morning, more than 30 people are now dead after a moroccan military plane slammed into a mountain. they are reporting this crash happened in the south of the country, 73 people were on board, mostly moroccan soldiers, five people have been found alive. we will bring you the latest as we find out more details about this crash. libya accused nato of killing eight people in an air strike against a food pantry and medical clinic about 25 miles west of misrata. nato claims that the attacks only hit military targets. michael mullen, the retired chairman of the joint chief of staff says the confrontation with moammar gadhafi has reached a stalemate. the deadline to raise the debt limit is a week from today. back-to-back speeches last night, president obama and house speaker john boehner made their cases to the nation last night. first the president argued the current stalemate is no way to run the greatest country on earth.

>> defaulting on our obligations is a reckless and irresponsible outcome to this debate. and republican leaders say they agree we must avoid default, but the new approach that speaker boehner unveiled today, which would temporarily extend the debt ceiling in exchange for spending cuts, would force us to once again face the threat of default just six months from now. in other words, it doesn't solve the problem. >> good evening. i'm john boehner. i served as speaker of the whole house of the members of both parties you elect. >> speaker boehner insisted republicans won't allow the government to default on its obviousligation but maintained only real solution to the problem is to cut spending. >> the two sides are not on the same page and unclear whether they're in the same book. >> language even. >> i may be naive about this, i tuned in last night thinking we were going to have something that approached a deal, sounded like a deal, encouraging. right now congress is not only

putting the nation's credit rating at risk but the nation's financial standing and its crucial crucial role in world markets. >> joining us to talk about this ron brownstein, cnn political analyst and editorial director of "the national journal" and [ inaudible ] two men who have seen it all. we're seeing something we haven't seen before. ron, let me start with you. are we going to get a deal, do you think, and what's it going to look like? >> well, everyone has assumed that since the alternative is almost unthinkable that we will get a deal in the end, but last night, as ali suggested, was not encouraging on that front at all. there was a certain source of cognitive dizzy dance in listening to the speeches. there are structural similarities between what john boehner and harry reid came out, both have a two-step process and a normal political environment you can imagine working toward

some kind of agreement built around that. there are important differences between them and last night, what you saw was john boehner and barack obama, emphasizing what's wrong with the other guy's plan, more than signaling how they might eventually resolve those differences. now that may be the last roar you give to your base before you make a deal, but for those who worry about the consequences of stalemate i think it was a little unnerving to have that kind of rhetorical argument which would have seemed more appropriate last week than going this close to the deadline. >> norman, talk about that for a second. the rhetorical arguments, the arguments that play to the base, you have particularly on the republican side, a difficulty in so far as you have a number of these freshmen republican congress men who came in on a wave of fiscal conservative with help in some cases from the tea party and a number of republican congressmen who have signed this americans for tax reform pledge that says they can't agree to anything that looks like anything smells like anything like a tax increase.

this is definitely hampering any approach to a compromise. >> it's not just the freshmen, let me say. >> sure. >> you've got senior members like jim jordan of ohio, the head of the republican study committee, you know, when they started the republican study committee which is the kind of conservative caucus about 40 years ago, it was a fringe group, a small fraction of the republican party. now it's 80%. 58 or 59 house republicans have said they won't vote to increase the debt limit under any circumstances. they've only got 240 and they need 218. boehner has a big headache inside his own caucus. we have very little time left. you know, when you hit these end game negotiations you'll often get exaggerated rhetoric, but i must say in 42 years in this town, i haven't seen anything like this and with time growing very short, if they cut a deal right at the end, i can even imagine people like senators mike lee and jim demint over at the conservative end, filibustering it and having us

go over the brink regardless and if the car goes off the cliff you can't put wings on it and fly it back. >> ironically when talking about trying to fix our financial problems and doing that in the near term you actually make our financial problems worse playing this game of brinkmanship, norman. we heard wall street might prefer the harry reid plan, they want things to be done and done. >> not done and done in six months ago. >> they want to know we're serious about this. do you agree with that assessment? >> to me that's a slam dunk. you've got to take this beyond the election. and it's not because of the president's re-election concerns. if you have to go through this same ridiculous fandango again in six months, it's the worst possible time. in the middle of the presidential primaries, when all the candidates are drawn to their extreme base, and all the congressional primaries where candidates on both sides are going to be pulled to their bases. so if you let this go, i think it almost ensures a downgrading in america's credit rating.

>> ron, let me ask you something. you have a poll you have conducted, the national journal, and united technologies, asking people what the biggest economic problem out there is. i have always believed these numbers to be true, that most americans, look, the economy ranks above everything else. but when you break down the economy, unemployment is coming in at 34%, gas and food prices following at 25%, then the federal government and then the government debt default. if you add up concerns about federal government and debt default not as high as gas and food prices and way lower than up employment. how do we hoodwink everybody into thinking we are somehow at the edge of a pressy pus and going to risk our credit rating for that when the biggest concern in this country is jobs. >> make the argument that washington should have been in these last several months on how you create jobs. the long-term deficit and debt is a serious problem but did not have to be solved as part of raising the debt ceiling. that was a choice that the

republican leadership in the house made and having made that choice, they -- kind of incumbent on them to find a way out of the cul-de-sac we're in. one thing that's striking in the poll and which those results point to, on the one hand our poll, like others, this poll shows that more people right now trust president obama than the house republicans on both the issue of the debt and the deficit. i think the contrast in last night's speech probably reinforced that advantage. as those numbers suggest, people do not share the sense of urgency that the possibility of default is a crisis in the way wall street and most economists do. so what president obama has is kind of a general sense that public supports his approach, what the public does not -- is not sharing his sense of urgency and providing that pressure on the members yet to avoid this. that pressure is going to have to come from elite institutions like the u.s. chamber of commerce, a supporter of the republicans and is warning that default would be, quote, catastrophic. >> you could argue they're not talking about jobs, they're

dangling the shiny keys of this because they can't fix jobs. the jobs has been a very hard problem to solve and maybe knows how to solve it. they're going to focus on this and use that as a means to try to talk about jobs. >> guys, thank you for joining us. good to talk to folks who know about this, ron brownstein, editorial director at the national journal, and norman onstein a scholar at the american institution. >> norm called its fan danego. we want to know what you think about this? what would you cut, what would you keep? e-mail us, give us a tweet. tell us on facebook. some would say taxes for me, whient cut programs. i would be starting to raise taxes, get rid of the bush-era tax cuts. some are saying you would end the department of education. >> lot talking about military overseas. foreign aid. >> what would you cut and what do you think we should keep? >> that's right. also there is another political battle going on this morning, faa showdown, shutdown,

putting airport work in a holding pattern. we'll have more details on. >> a high altitude face-off. reports out this morning two chinese fighter planes intruded into taiwanese air space as they tried to chase away a u.s. spy plane. those stories and more coming up next, 44 minutes after the hour. naturals from delicious, real ingredients with no artificial flavors or preservatives. naturals from purina cat chow. share a better life.

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good morning, washington, d.c. it's everyone's favorite work place with all of america's favorite elected officials. fair and 78 degrees, feels like 78, mostly sunny really, 94 later today. we hope none of them are going outside, they're all inside doing the hard work we pay them to do. >> they have a lot of work to do. congress failed to authorize funding for the faa and now the federal aviation administration has been forced to furlough thousands of employees and dozens of major projects are put on hold because the lawmakers can't agree. air traffic controllers remain on the job, but nearly 4,000 other workers in 35 states have been told to stay home. the reason is efforts to renew funding for the faa hit a stumbling block friday when house republicans tried to make it harder for airline and rail

workers to unionize. that was part of the deal. that did not then get approved. >> not just the budget, not just the debt ceiling stuff, there's things being stalled in washington. the u.s. and china tangled in one of the hot spots the "financial times" says two jets crossed into taiwanese air space to pursue. china's planes turned around when taiwanese planes were scrambled. one of the chinese fighters crossed the middle of the taiwan straight widely considered to be the boundary between taiwan's air space and that of mainland china. by the way, this is not a common occurrence at all. this has not happened at least we've not heard it's happened in decades. >> one of the hotly contested pieces of territory in the world and a place where two rivals are poised with the u.s. stuck between being an ally to taiwan or china. >> ef they've managed to keep military peace. breaking news right now, more than 30 people are now dead after a moroccan military plane

slammed into a mountain. the afp reports the crash happened in the south of the country. a 73 people were on board, mostly moroccan soldiers, five people have been found alive. your morning headlines up next, plus good news, especially if you pay out of pocket for your prescriptions. the cost of several prescription medicines used by millions of people every day are about to plummet. we'll explain why coming up. it's 49 minutes past the hour. [ female announcer ] what if your natural beauty could be flawless too?

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cass mare suspect anders breivik claiming he had help from several terror sells on friday's attack that killed 16 people in norway. they say he was on some kind of drug to stay awake and alert during that killing spree. president obama calling on the nation to pressure their elected officials to work out a debt ceiling compromise. that challenge came during the president's prime time speech last night. he also argued the current stalemate is, quote, no way to run the greatest country on weather. house speaker john boehner says the president wants a blank check and that is not going to happen. he says the solution is simple. stop spending and don't raise taxes. u.s. stock futures are trading higher this morning. investors waiting on several economic reports on housing, as well as consumer confidence numbers coming out later this morning. wall street is watching capitol hill closely today for updates

on any progress in this debt ceiling debate. you're caught up on today's headlines. "american morning" is back after the break.

where is that? >> wow. that looks like the lower third of atlanta. ing iffy day in atlanta. it says partly cloudy. seems lots of cloudy. >> either that or somebody hung a white t-shirt. >> jacqui said it's a low cloud actually. going to be 91 degrees in atlanta but can't see anything from there. haven't seen that before. millions of people take

prescription drugs every day and about to get cheaper. many drugs will go on sale as gentleman ngenerics the next fe years. >> senior medical correspondent elizabeth cohen is here to explain. what drugs are we talking about here? >> really popular drugs and great news. whenever a drug goes from being exclusively brand name to being something that can also be a generic, it is good news for the consumer. let's take a look at four of these drugs where, in the next year, we expect them to go generic. lipitor, plavix and singulair. and lexapro. when only one company makes something it's going to be pretty expensive. >> what is the -- how much of

these drugs usually go down by when they go generic? a normal amount or vary depending on the drug? >> it does vary but it's usually quite substantial. take a look at what the drugs cost right now and i think give you some kind of an idea. if you don't have insurance and paying out of pocket for lipitor, it's about $186 a month. plavix, $215 a month. singulair, 182 and lexapro $117. you might see something like, let's say, when they are generic, in the recommend m of 15, 20, $35 a month. could be something in that neighborhood. as time goes on they could end up on the $4 generic list. >> some people are asking is generic just as good? >> the same formulation? >> experts will tell you the same formulation and no difference whatsoever.

>> if you're taking a pricey drug right now and waiting for it to the generic, what should you do? >> a great moment to be an empowered patient. one question can save you a ton of money. if you're prescribed lipitor which is $186 a month, ask your doctor is there another drug that will work as well for me and cost less? plenty of statin drugs are $4 a month and it might very well work als well for you or if you're prescribed lexapro, $17 a month you can is a generic prozac. just ask if you can take something else. >> your insurance company kind of pushes you along that way as well. >> sometimes you don't need to ask because your insurance company will make that decision. i'm not saying there is always a less expensive alternative that will work just as well but often

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i'm christine romans. we are just one week now from the deadline that could wreck america's economy and reputation. president obama makes his case for a deal and house speaker john boehner answers. we are live at the white house with the latest. >> i'm kiran chetry. what, if anything, did the back and forth accomplish and are the two sides any closer to a promise? we will be speaking with senior political analyst david gergen. i'm ali velshi. a new sturdy is showing the wealth gap is growing even wider on this "american morning." ♪ ♪ it is tuesday, july 6th. the headlines -- no deal. the clock ticks toward the debt ceiling. >> as it gets closer and closer a lot more frayed nerves and questions about our future economic health. the debt crisis is looming. the president and house speaker

john boehner try to take their cases directly to the nation last night. first, it was the president. he gave a prime time speech as the nation is now a week away from this august 2nd deadline. the president made it clear he will refuse to accept a short-term solution because he argues that republicans will use it to keep playing games. in the meantime, speaker boehner responded saying he is giving it all but the president who wants to keep on spending. >> we know what we have to do to reduce our deficits. there is no point in putting the economy at risk by kicking the can further down the road. >> the sad truth is that the president wanted a blank check six months ago and he wants a blank check today. this is just not going to happen. >> last hour, i spoke to gene spur spur ling. he made news here on "american morning." he said he is confident that a common sense compromise is not out of the question, despite the differences that we saw between democrats and republicans.

>> there is a lot of goodwill that i still believe exists in this -- in this country in washington. and we just need a basic, a minimum amount of compromise, a minimum amount of not my way or the highway and we can get this easily this week. >> a minimum amount of compromise and we can get there easily this week. optimistic? >> right. >> very optimistic. >> gene went to bed early last night. he didn't watch the president and john boehner. >> let's cut through the process and tell you what the bottom line is about this this morning. congress is threatening to damage america's standing in the world because, right now, no sign of a deal. >> yeah. >> that is the bottom line. dan lothian is live at the white house. what are we learning more about this morning? >> reporter: i think as you pointed out, we are pretty much the same spot, at least publicly, where we were yesterday, where both sides are still far apart. you have republicans not willing to embrace what the democrats are pushing which is extending the debtcele through the end of

2012. democrats not willing to embrace what republicans are pushing which is essentially breaking it into two tiers, extending the debt ceiling through the rest of this year, and extending it again if 2012. i think what you saw last night is happening at the white house today there was a certain level of frustration. you heard from the president the american people did elect this divided government but not a dysfunctional one. so the hope is that they can, you know, was the chratchet bac far no agreement. >> what is the incoming message at congress or white house you're sense. we know they have been briefed bring the same people who brief us and tell us what the consequences are. we keep hearing we need a deal with enough time to get legislation in place to raise the debt ceiling. what is the sense of plan b that you're hearing? >> reporter: well, you know, they are preparing here, as you

pointed out in that interview with gene spurling, they are preparing for the emergency, you know, deciding who would get paid and who would not get paid. so that is ongoing. but beyond the scenes, we are told by sources, that democrats and republicans are still engaged in discussions. again, they are not embracing the plans put out there publicly, but they are hoping they can find some kind of proposal that is in the middle somewhere, that is more moderate, that perhaps they can get something done. but, you know, you're bumping up against that august 2nd deadline and it's unclear if there is anything that they can get done in time before august 2nd. >> you know, so interesting. dan, thanks so much. we have these debt commissions every few years. we know we have a debt problem and never given any problem. here we are again. >> a bunch of elder statesmen and women in a room and try to

figure out a an answer, get a nice report and then here is what happens. >> the problem is what makes sense and what is expedient are not the same thing and we are in an election year. >> we take it to the people. >> since politicians have not sorted this out yet, we want to know if you had the budget ax, what would you cut first and what would you keep? here are some of your answers. >> pat says i would repeal the bush tax cuts and cut ethanol and subsidies and farm subsidies and subsidies to gas and oil oil companies and farm subsidies. where is the proof? the tax cuts aren't creating jobs now and i would keep our servicemen and women's pay and ridiculous to even consider punishing our brave ones. i hear that sometimes when people are talking about that. i hear liberal say the tax cuts didn't create jobs either. >> in the meantime, i think anybody is talking about cutting benefits to the veterans or

active service members. i think that is a high priority that will absolutely happen but still scary to think about. another person on twitter who writes cut the budget on both wars. keep social security. >> we should take this a moment to remind people. social security is an insurance fund. it runs separately and underfunded but actually not part of this debate. you'll notice when the president talks about this, he talked about medicare and medicaid. they want to deal with social security because it's a budget. but it's not. >> when we dip into social security to pay for other things we know it's not going to be solved. >> that's why it's a problem. >> you hear my goodness will i not get my check? people's ears perk up. >> that is a reality that people might not get their checks. we are hearing on august 3rd, $22 billion in social security payments are due that day and

something will not get paid that day if the debt limit is not resolved. i want to bring in david gergen. he joins us this morning from washington. thanks so much for being with us. funny. ali was saying he thought perhaps when he saw the president and john boehner announce they are speaking to the nation he thought a solution was in the works. what are your impression how close they are to any type of deal being worked out? >> we are certainly a ways away. i think last night's speeches would have been terrific had they been given three or four weeks ago. but on the eve of a potential disaster to give two partisan speeches which told the nation in effect we're a long away way from each other must leave a lot of americans today who are worried that they may not make it and they may not. i actually think behind the scenes thing things are a little more ening. among other things they have the conversation focused on both the

senate and the house on spending cuts and not on the issue of whether we should raise taxes. right. >> democrats seemingly taken that off the table in congress. makes it a little easier to reach a compromise. i think the chances are growing the president will give them another couple of weeks if that is what they need to hammer out something. the reid and boehner plan likely to go down and look for a plan b, c, d, or eo fr. >> a you think we will get to august 2nd and beyond and it will not happen and in the meantime they have to do a tempora temporary, short-term deal to allow us to raise the debt limit? >> i think it's pretty clear we will get to the end of this week with these two current plans going down and scramble to find the alternative and they are talking what the alternative might be but take time to get the alternative hammered together and passing the two chambers. i think if they got to that point, the white house would give them an extension of the debt ceiling.

the white house would ask for a temporary extension for the debt ceiling and a couple of weeks and let them finish the job and come forward. we would all have to hang together on this but a lot better than the two peaches last night. i think for a lot of us, the speeches we were looking for, people were reaching across and trying to get it pulled together. instead, we got people who wanted to make their partisan point. >> john boehner looks like he is in a no-end situation. speaker of the house has had his own 100 plus tea party caucus members in that house say absolutely not to what he was proposing, even though they were not talking about any type of tax increases. where does he -- how does he bring any of these people on board so he can get it out of his party? >> well, he's got a plan that the president really, really does not like, because it would require a second round of this kind of fight within about six months. the thinking was he would get his plan through the house

pretty easily because the house leadership united behind him, but there are a number of renegades who have broken off and questions this morning the boehner plan could die in the house but whatever happens, the boehner plan will not get through the senate and the reid plan cannot get through the house. at that end we are stalemated. you look at it from john boehner's point of view. he started this conversation with the president wanting a clean debt ceiling. boehner has gotten to the point where we are probably going to get 1 trillion to $2 trillion worth of cuts. i want to come back to the main thing. for a lot of americans are tired of the talk and tired of the partisanship and the rest. ali and i have talked about this forever. and they want to see solutions and what we didn't hear last night were real solutions. we heard, you know, people talking past each other. and not to each other. >> and so in terms of the president, i mean, how much pressure is he under right now?

>> he is under enormous pressure but there is a fair amount of feeling up on capitol hill they would like to have him be on the sidelines for the negotiations. they would like to do the negotiations among congressional leaders and the two people to watch probably are mcconnell, nor mcconnell, the republican, and senator reid. either they will cut the deal or boehner and reid will cut the deal. we are not sure whom. the white house will bless it. i think the plan is much more likely to come now out of the final alternative out of congress and congressional talks and those talks are under way and they are talking frequently and with urgency and there is more trust among the congressional leaders in some ways than there is towards the white house. >> what is your tag looking to 2012? a lot of politicians are looking at their chances come 2012. who, if any of this is passed and you said with no tax increases, we are talking about

a lot of cuts to benefits here, questions about whether or not we will see an increase in revenue. we talk about the great recession. who suffers at the polls in 2012? >> i'm not sure we are going to see a lot of cuts and entitlements. the replan does not do that, nor does it raise taxes. look. i think fundamentally, the agreement they come up with is going to be modest. it's possible a miracle could happen and get a brand bargain, that would be great, but more likely to be a more modest plan and that leaves a slam bang election over these very kind of issues that we are talking about last night. let me make one final point. i think the odds are moving slightly toward a resolution of the debt ceiling. but there is a second issue and that is the credit rating for the united states. we have a aaa credit rating and even if we get the debt ceiling revolved, as i think we ultimately will, this contentious period, plus the

modesty of a final result, is increasing the odds. in fact, making it a probability that standard & poors will downgrade america's credit rating. that will ab blow to us, not only will it raise interest rates modestly but a blow to our prestige and unsettle banks and have a lot of repercussions that ali can go into. is there a sense in washington that that that probably is going up. and, you know, frankly, that's not a happy outcome. that is not good and play into the elections and it's going to be repercussions that will last for a long time. we have had the aaa credit rateding since 1917 and never downgraded and u.s. paper is almost as good as currency in gold and to have it moved into a aa category, frankly, that is an unhappy outcome and should not have happened. this is a self-inflicted wound. we have emergency speeches usually coming because somebody else is doing terrible to us. in this case we had emergency speeches last night because we are doing it to ourselves with the self-inflected wounds and

ought to be heavy blame if we get downgraded. >> we will see if that type of common sense, i guess you could say, will prevail in the walls of congress as we continue to watch the fight come down to the wire. david gergen, senior political analyst, thank you. >> thank you. >> you're guys are the experts in this. if we are talking about cutting spending and trying to get our fiscal house in order why we would be downgraded in terms of a credit rating? >> the world wants to see that about but what they see is political disarray in washington and we are not getting it together and using the debt ceiling as -- >> david gergen said even if they come to an agreement on it the credit rating will still get downgraded. why? >> this is not optional raising the debt ceiling. the fact we are discussing it as optional is affecting our credit worthiness. david is right. this is self-inflicted and there should be a lot of blame to go

around and i really trauly hope americans blame everybody involved in this, including themselves, if this doesn't go right because this will hurt us for decades to come if it happens. >> if our credit ratizing lowered we have to pay more interest on all of our loans and the companies who operate here also face higher costs for doing business. >> and that what causes them to lay people off. >> yes. still ahead, gunfire inside new orleans national airport after a passenger's gun actually discharges. i hate it when that happens. a united airlines agent hit by the bullet. >> hate that even more! >> an amazing story of a gun going off at new orleans international airport. that is next. heavy with the news here but mariah carey is cutting through the darkness. she was appearing on the home shopping network and in rare form ordering around the models and it is worth a look when we come back. [ male announcer ] this...is the network --

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it's me? alright emma, i know it's not your favorite but it's time for your medicine, okay? you ready? one, two, three. [ both ] ♪ emma, emma bo-bemma ♪ banana-fana-fo-femma ♪ fee-fi-fo-femma ♪ em-ma very good sweety, how do you feel? good. yeah? you did a really good job, okay? let's go back to drawing.

♪ wow, that voice. just haunting. family, fans, friends, paying their final respects to amy winehouse. a private ceremony funeral today. so sad hos how painful it is for her parents. how she decide is a mystery. autopsy proved inconclusive. a couple of weeks now with results of toxicology tests hechlt 37-fold increase in her album sales since saturday when she was found dead. now fans and music experts are clamoring for the release of a reportedly unfinished third album. winehouse although she had been touring and we had seen some video of her really seeming to

have trouble even standing up on stage, she had not released an actual album in four years. >> she had been booed off the stage at a recent number of performances and even her die-hard fands were frustrated by it. police say a passenger at new orleans international airport was checking in his hunting rifle at the united counter when it accidentally discharged and hit an agent. the agent was taken to the hospital. the passenger was issued with a summons. you show up with the gun and no ammunition in it. it's for the typical for hunters to make that sort of mistake. they tend to be safe gun users and know to check their guns. forgive her if she is a little rusty but mariah carey first major appearance on television since giving birth to twins on the home shopping network.

let's take a listen to part of her appearance. >> i don't know where to look at you because there is 20 zillion cameras here. i'm looking at 4. there is 5. i didn't know there was math involved! if you guys can go up and can we see? not to dick eight shots but we are giving you moments. please, you guys, go to a close-up of the side where the gold is. >> can you see that right there? >> thee details were very important for me. if you can go down. cut away from me. put this close-up on. >> don't show that! my microphone just fell off my body! >> see, guys? you should be glad that it's us. >> she's a performer! it's not like she has gone around life with one camera in front of her. she knows the deal. all in good fun. >> she wanted to sell her waire.

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25 minutes after the hour. "minding your business." u.s. stock futures are trading a little higher this morning. investors waiting on several economic reports on housing and consumer confidence that are coming out later this morning. wall street also watching capitol hill closely today for updates on the debt ceiling debate. thousands of small town post offices may not be around much longer. today the u.s. postal service will release a list over 3,600 post offices that could be shut down and some areas the postal service will partner with local businesses where you can drop of your mail in their absence. u.s. companies will spend billions of dollars fighting cybercrime according to a security organization and a problem circulaescalating. the nissan leaf winning the highest score in the government's crash safety test. it scored five stars in the tougher rating system too. up next, braeging news that defense lawyer for anners

breivik says his client may be insane. "american morning" is back after the break.

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this is cnn breaking news. new developments this morning in connection with that brutal massacre in norway. the suspect anders breivik is claiming he worked with terror cells both in norway and abroad to pull off friday's deadly attacks. police are not commenting on that and continuing their investigation looking into possible links. breivik's attorney says he used a drug to keep him strong and away drs tduring the mass shootings. >> he talked about two terror cells. he says he is sorry he had to do this but it was necessary to start a revolution in the western world. >> meanwhile, the death toll of

the slaughter has been lowered to 76. but it could rise. people attended a memorial service in downtown oslo yesterday. the mayor is punidemanding to ph the suspect. >> the father of the suspect is ashamed. he now lives in retirement in the south of france. here is what he said about friday's massacre. >> translator: i'll never have more contact with him. in my darkest moments i think rather than killing all of those people, he should have taken his own life. >> those are strong words from a father. >> translator: they are but thinking about what has happened, i get so upset and i still don't understand that something like this could happen. no normal human being would do something like that. >> he says his son is mentally ill and he also says the two have not spoken to each other for about ten years. deadline to raise the debt limit is one week from today.

president obama and house speaker john boehner last night made their cases to the nation. the president argued the current stalemate is no way to run the greatest country on earth. >> defaulting on our obligations is a reckless and irresponsible outcome to this debate. and republican leaders say that they agree we must avoid default. but the new approach that speaker boehner unveiled today which would temporarily extend the debt ceiling in exchange for spending cuts would force us to, once again, face the threat of default just six months from now. in other words, it doesn't solve the problem. >> speaker boehner insisted republicans won't allow the government to default on its obligation but he maintained the only real solution to the problem is to cut spending. >> while politicians have their eye and a lot of people on main street and businesses have their eye on the august 2nd deadline, politicians are keeping another big date in in mind, election day 2012. >> jim acosta is live in washington with a look at the

possible political fallout for both sides. from my read of how angry people are with washington they are blaming all of them at this point. >> reporter: they really are, christine. you know, there's enough blame to go around on this one. six days and counting on the debt ceiling clock, the pressure is on. there is little progress from these negotiations after what was more of a state of the disunion last night. the president and house speaker john boehner brought more talking points than proposals in their competing addresses to the nation. >> we know what we have to do to reduce our deficits. there is no point in putting the economy at risk by kicking the can further down the road. >> sad truth is that the president wanted a blank check six months ago and he wants a blank check today. this is just not going to happen. >> reporter: you know, what is interesting about those speeches last night you didn't hear the word veto. you didn't hear the speaker saying he was walking away from the negotiating table. so what is really going on up on capitol hill right now is both

sides are really still talking behind closed doors. later this morning, speaker boehner will meet with some of his very conservative republicans and his caucus and his conference. some of them are very weary of his plan on the debt ceiling. spokesman in boehner's office tells cnn, we got a quick quote from his office earlier this morning and here is what he had to say. we are moving forward wednesday with the bill we think the senate can pass and the president should sign. so there is some optimism up on the hill. these votes could come wednesday on both of the boehner plan and one from reid that has the backing of the president but not clear whether time for both proposals to reach its way through the congress before august 2nd. looking at the polling this morning, it's pretty clear that both sides are being blamed for this. you know, there's "the washington post" poll out this morning that shows this. check out this poll that we had out just a few days ago.

is president obama cooperating enough with republicans and congress? yes 42%, no, 57%. that sounds pretty bad but what about when you ask the reverse? are republicans cooperating enough with the president? 68% say no, only 30% say yes. so that is a recipe for a bad election cycle for both of these sides come election time if this really goes to the brink and beyond. >> it's great for people with their base. >> reporter: absolutely. >> to say, we sooed stood our ground and didn't compromise. we pushed to the bring and got what we needed. but most americans are not in one of those bases. that is the problem. >> reporter: that is the problem. i think that is why you hear both sides leave the door open a crack. there was some pretty heated rhetoric last night. the president saying the american people might be collateral damage and the speaker saying we are not giving the president a blank check. these are recycled in prime time

television but what wasn't said is we are closing the door. as that old saying goes, if we don't hang together, we will hang separately? both sides know that if they don't get this done, it's bad news for all of them. >> all right. jim acosta for us this morning, thanks so much. >> you bet. >> there was a deal made. >> at least you can watch football. players and owners finally agreeing to end the lockout. they have a new feel after four and a half months back and forth. patriots owner bob kraft is wondering why it's taking lawmakers so long to do the same. >> i hope we gave a little lesson to the people in washington, because the debt crisis is a lot easier to fix than this deal was. >> well, teams do have a lot of work coming up in the next week. they will be able to sign free agents. get their salary cap issues worked out as well. that is coming up this week. >> leaa lot of you are talking about new profits for bp. one year after the worst oil spill in u.s. history a $22

billion turnaround for bp. 5.3 billions in second quarter earnings. last year, bp lost more than $17 billion in the second quarter because of that oil spill. the company, however, managing to turn that big leaking ship full of oil around. >> so if you bought -- >> a lot of people did. amanda knox is she moving a step closer to freedom? forensic scientists may have had some glaring errors. we will talk about that next. >>.

39 minutes past the hour. the new york hotel maid who chams that dominique strauss-kahn sexually assaulted her is planning on filing a civil case this week. >> new developments in the amanda knox murder case. mistakes by the italian police could help attorneys get her

conviction overturned perhaps. joining us to discuss both of these cases is sunny hostin and paul callen. let's start with the dsk maid no is now known. she now has a name, diallo. what does it mean for her case? >> it shows for me a problem with the prosecution. i have prosecuted these kinds of cases and no way you want your star witness, your victim to be giving public press releases. so i think certainly it could be a move by this woman, by her team, to try to force the prosecution's hand. that is not a good thing to do for the manhattan d.a.'s hofs wi office. they are not pressured by the media. they don't do trial by television so i think it shows a huge disconnect.

>> i tell you, reacting to television coverage. >> i don't think so, i don't think so. >> this woman was trashed in the media and hadn't spoken out in all of the reports. one of the tabloids ran with the front page story blaring she is a hooking and she is suing because of that. did she help her case some when you watched her she came across as a credible believable witness. >> i'm kind of kidding with sonny. no, i think she has ruined her case. >> really? >> what she is forgetting the prosecutor can proceed or discontinue the case. she has done this astonishing public relations campaign giving interviews on the press. the one thing you don't want with a crime victim is multiple stories she can be cross-examined with. she is trying to put public pressure on cyrus vance to prosecute the case. you never reveal the name of a

relationship victim and here she has revealed her own name so this is an astonishing development. >> it is usual. >> i think in the end 'res vance, the d.a., walks away from the case and moves to dismiss. >> i think some rape victims have come forward before because they say they want to stand up and say i have nothing to hide from, i was a victim. >> i think a great point, christine. >> i do want to say this. just because she's found to be not credible does not mean that this didn't happen. i watched her. i have read her reports. i don't know what happened. i wasn't in that room. but it doesn't mean she wasn't attacked. it doesn't mean she wasn't raped in this prosecution doesn't go forward. >> i don't know what went on. but you kiran, you were saying you saw her statement. i was watching people watch her as i often do because you wonder how a jury is going to react. a lot of women were watching her saying, she is, obviously, lying. she just looks so -- >> i had the exact opposite reaction. see, the thing is maybe a jury

should decide. >> apparently that is what -- i mean -- it seems the prosecutor back is against the wall. what do you do? she is coming out with this tearful explaining this happened to her and if they back away from it does it look like they are ignoring -- >> the prosecutor can say let's give it to a jury of 12 and let them decide. >> you have to -- it is easier to prove but a prosecutor's job is to seek justice, to seek the trudge and not bring cases that a prosecutor can't prove and in this case, she's had so many inconsistent statements. i'm not sure a prosecutor could prove this case beyond a reasonable doubt which is the criminal standard. civil case, prepeonderance of the -- >> if i'm amanda nox's lawyers. they put a completely individual expert out there. not brought by the defense or prosecutor and they said that the supposed dna of amanda knox

on this knife was not hers and it was actually vegetables from a cutting board? how is she still in prison? >> two independent witnesses, not one, have looked -- court-appointed looked at the dna and the only evidence physically linking her to the crime. vegetable material. not the victim's blood. but a second thing, a bra clasp that supposedly linked her boyfriend sollecito. that was found in a pile of garbage at the crime scene maybe nine or ten other people had access to it. that has been discredited. this case is shattering and amazing she is still in prison. >> we will continue to watch that. thanks to both of you. >> a quick break. morning headlines coming up.

this is cnn breaking news. >> breaking news this morning. cnn confirms 78 people are dead

and three more severely wounded after a military plane slammed into a mountain in the southern part of morocco. again, now 78 people are dead in that plane crash. massacre suspect breivik in norway is claiming he had help from several terror cells there and abroad to launch friday's attacks that killed 87 people and his lawyer claims breivik was on some kind of drug to stay awake and remain alert during that killing spree. new video in to cnn. a small private funeral today for singer amy winehouse in northern london. family and close friends attended the service. could take another month for the results of the toxicology tests to determine how she decide as an early autopsy was inconclusive. president obama pressuring the elected officials to work out a debt ceiling compromise. the president argued the current stalemate is, quote, no way to run the greatest country on

earth. in his response, house speaker john boehner said the president just wants a blank check and that is not going to happen. he also insisted the solution is simple -- stop spending and don't raise taxes. a number of congressional web sites crashed after the president's speech last night. they apparently couldn't handle the high volume of responses after the president urged americans to contact their members of congress. right now, u.s. stock futures trading a little bit higher this morning and investors waiting on several economic reports. housing and consumer sfed among them coming out this morning and watching capitol hill closely for the updates on the debt ceiling debate. kansas, missouri, oklahoma, arkansas, louisiana, arkansas, nebraska, north carolina and texas with heat index expected to reach 110 degrees in some laces. a heat wave the last week has claimed more than 20 lives across the country. last weekend, temperature records were set or tied in 41 cities all the way from maine to north carolina. you're caught up on today's

headlines. "american morning" back after the break.

♪ substantially clearer for atlanta than the last time we looked. >> took the shlft shirt off the camera. >> do you think that is atlanta or something on the camera? >> it's really atlanta. >> wow. 76 degrees and very cloudy. it feels like 74. how do you get it to feel -- i guess it's backwards? >> the haze is burning off. >> up to 91 later on today. a healthier, happy meal for the american family now. mcdonald's says it is adding vegetables and fruits to its

happy meal and cutting the amount of fries. only seven fries in that box anyway because we are always trying to sneak one from the kids. >> it's true. last year, san francisco banned happy meals at restaurants. new york is considering doing the same. get your baby carrots and get your toys back in there. >> the kids don't know the french fries come with the happy meals! >> i love you so much but i'm glad i don't come back as your kids. >> your cholesterol would be lower. when you think salmonella you think of raw chicken and eggs. take a closer look at your papay papayas. the fda says contaminated papayases from new mexico could be the source of outbreak of salmonella. no deaths. all of it was distributed by

agramode produce sold before -- >> the thing is the salmonella even on eggs is on the outside. >> right. >> like you thoroughly wash it. if you wash it and peel it for the most part i mean, you know? >> i got violently sick. the doctor said what have you eaten? it hadn't registered the papayas was it. it's amazing for you, isn't it? >> it is. >> no salmonella there. prescription drugs many of you use every day are about to go generic and could get cheaper. six of the top ten selling drugs are losing their patents in the next years. lipitor, plavix and singulair could save people a quarter of a trillion dollars globally. motocross is known for spectacular wipeouts but a crash

that almost killed one racer isn't keeping him off his bike or his dream. dr. sanjay gupta has the story in today's "human factor." >> reporter: four-time national motocross champion doug henry's racing career has taken him to incredible heights and devastating lows. he's been inducted into the american motorcycle association's hall of fame and won $s of medal and trophies over the years. look closely. you'll see this bike is modified with a bar and strap that help him stay on. because four years ago, the unthinkable happened. and he was paralyzed. >> when i hit the wall between the bike, you know, i was stuck between the bike. you know, it was the end. it was the end for me. it was all over. >> reporter: henry's love affair with racing began when i was 4. at 15, he entered his first race. had a mid air collision and broke his arm. after turning pro at the age of 20, henry had another bad accident and broke his back for

the first time. but he recovered. two years later, he was back on the track. there were more injuries. over 200 certifies crashes, but he always walked away, until march 4th, 2007. he lost control on a corner during practice. >> i knew it was over. i just -- everything. just -- dancing. i wasn't much of a dancer! but i knew i wasn't going to be. i thought about all of the things that we couldn't do or wouldn't be able to do together. >> reporter: it got worse. two weeks later, his wife stacy was diagnosed with breast cancer but, together, they got through it. henry is partially paralyzed from the waist down but it wasn't sfoped him from competing. he has modified a snowmobile and dirt bike designed it and henry

hopes he can motivates others whose lives have suddenly taken a detour and help them get back to doing what they love. >> i try to do as much as i can now and enjoy the day, just try to get the most out of my life. >> reporter: dr. sanjay gupta, cnn, reporting. i'm phil mickelson, pro golfer. if you have painful, swollen joints, i've been in your shoes. one day i'm on p of the world... the next i'm saying... i have this thing called psoriatic arthritis. i had some intense pain. it progressively got worse. my rheumatologist told me about enbrel. i'm surprised how quickly my symptoms have been managed.

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♪ no time for a workout today in washington. the only thing they are trying to do is hammer out some agreement. it's fair as we look at a shot at the white house. 82 and later, it will be 94 and mostly sunny. back to our question of the day. since politicians have not amored out the debt ceiling crisis, we want to know what you would do. bob says cut back medicare. as to the. damage to our elderly as warehouse them and draining

their medicare benefits. fix or end medicare. >> robert says we need to have term limits in both houses just like the white house. have publicly funded campaigns and make it a federal crime to give money to politicians. ouch! corporate influence in government is killing this country. excellent opinion. >> he didn't answer our question! >> but he did have an opinion. another one is corporation tax loopholes saying what should be cut. bp made $5 billion last quarter. yes, that bp. >> the debt ceiling soap opera continues, jay leno found one thing most politicians agree on. we loved this! in case you were sleeping when it took place, check it out. >> freeze it right there. freeze is right there. harry reid can't agree on a budget? they obviously agree on everything else. look at them. same hair, same glasses, same sport coat, same shirt! why can't you agree on this?